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Sunday, August 31, 2014

Analyst predicts lowest Labor Day gas prices since 2010

Most U.S. motorists will encounter the cheapest Labor Day weekend for driving in four years thanks to a downtrend in gasoline prices that began in July and probably won’t conclude until fall, the website GasBuddy.com predicted Wednesday.

Partly as a result, traffic is expected to be heavy on the nation’s roads: AAA Travel projects 34.7 million Americans will journey 50 miles or more from home during
the holiday weekend, the highest volume for the holiday since 2008 and a 1.3 percent increase over 2013. ...

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Most U.S. motorists will encounter the cheapest Labor Day weekend for driving in four years thanks to a downtrend in gasoline prices that began in July and probably won’t conclude until fall, the website GasBuddy.com predicted Wednesday.

Partly as a result, traffic is expected to be heavy on the nation’s roads: AAA Travel projects 34.7 million Americans will journey 50 miles or more from home during
the holiday weekend, the highest volume for the holiday since 2008 and a 1.3 percent increase over 2013.

About 1.8 million New Englanders are expected to travel over the holiday weekend, a 1.6 percent increase over 2013.

Off the roads, 8 percent of travelers – about 2.65 million – will travel by air, a 1 percent increase from last year.

Gasbuddy.com said cheaper global and domestic crude oil prices have pushed costs for North American refiners lower despite violence in the Middle East and uncertainty about long-term Russian energy supplies. U.S. benchmark crude oil futures are down nearly $9 a barrel from where they stood ahead of Memorial Day weekend.

“We expect to see stable gasoline prices from now through mid-September,” GasBuddy.com chief oil analyst Tom Kloza said. “Some more significant declines could come after September 15, when the ‘recipe’ for gasoline changes in most states.

“By Veterans Day, we anticipate that much of the country could be looking at average prices below $3.25 a gallon with thousands of stations under $3 a gallon.”

Regions that receive most of their gasoline from the U.S. Gulf Coast, which accounts for more than 51 percent of U.S. refinery capacity, could see the cheapest prices.

Some competitive retailers have already dropped prices to $3 a gallon or lower in 10 states, all of which get much of their fuel from refiners in Texas, Louisiana and Mississippi.

GasBuddy.com also projects that pump prices will dip in Rocky Mountain and Midwestern states, as well as Southwestern and Pacific Northwestern locations.

Less certain is the 60-day outlook for California and the Northeast.

Northeastern supply tightness could linger thanks to some looming refinery maintenance in the Canadian Maritimes, the site said.

As for other costs, AAA said airfares will be an average of 2 percent higher than last year, daily car rental costs will be about the same as last year at $51 and hotel rates will be much higher: 9 percent higher for midrange and 6 percent higher for upper range.